Determinants of economic well-being among U.S. farm operator households

Participation in government programs has a mild impact on the economic well‐being of U.S. farm households. Major factors that determine farm household prosperity are the primary operator's education level and ethnicity, education level of the spouse, and other characteristics such as forward purchasing of inputs, use of contract shipping of products, having a succession plan, farm ownership, and location in a metro area. This article uses the 2001 Agricultural Resource Management Survey (ARMS) as well as relative and an absolute measure to assess U.S. farm households' economic well‐being. The relative measure compares the income and wealth position of farm households relative to median income and median wealth of the general population. The absolute measure adds annualized wealth to a farm household's income.     

How do obese people afford to be obese? Consumption strategies of Russian households

This article investigates the extent to which Russian households that differ in their members’ weight status adjust their food consumption differently when their economic resources change. Using household‐panel data from the Russia Longitudinal Monitoring Survey (RLMS) from 1995 to 2005, we estimate total expenditure elasticities of food expenditures, food quantities, and food quality for normal‐weight, overweight, and obese households, respectively. The expenditure elasticities of quality derived for obese households for meat, bread, fruits, and dairy were found to be 15–20% higher than those of normal households. Hence, a change in economic resources causes obese households to adjust the quality of purchased foods significantly more flexibly than normal‐weight households. Only few differences were found for quantity and expenditure reactions. Our results emphasize that policies aiming to reduce obesity should consider deviations in consumption behavior of normal and obese consumers in terms of quality.     

Assessing the Impact of the ‘Decoupling’ Reform of the Common Agricultural Policy on Irish Farmers’ Off‐farm Labour Market Participation Decisions

This paper assesses the impact of the ‘decoupling’ reform of the Common Agricultural Policy on the labour allocation decisions of Irish farmers. The agricultural household decision‐making model provides the conceptual and theoretical framework to examine the interaction between government subsidies and farmers’ time allocation decisions. The relationship postulated is that ‘decoupling’ of agricultural support from production would probably result in a decline in the return to farm labour but it would also lead to an increase in household wealth. The effect of these factors on how farmers allocate their time is tested empirically using labour participation and labour supply models. The models developed are sufficiently general for application elsewhere. The main findings for the Irish situation are that the decoupling of direct payments is likely to increase the probability of farmers participating in the off‐farm employment market and that the amount of time allocated to off‐farm work will increase.     

Diet diversity,malnutrition and health: Evidence from Kenya

We investigate the effects of diet diversity on health outcomes indicated by the body-mass index (BMI) of Kenyan women in their reproductive age (15–49 years). We estimate the demand for diet diversity (which is a proxy for diet quality) and analyse its relationship with BMI by allowing the effect of diet diversity to vary along the conditional BMI distribution. Results show that diet diversity is associated with a beneficial effect on the lower and upper tails of the BMI distribution, that is, dietary diversity improves BMI for underweight individuals while, at the same time, it reduces BMI for overweight/obese individuals. Specifically, doubling the diet diversity is associated with a 14.7% increase in BMI for underweight women and a 7.0% reduction in BMI of obese women. These results support the hypothesis that diet diversity is associated with optimal BMI and, thus, better health, contributing to the policy discourse concerning the double burden of malnutrition in developing countries.     

Food aid and adult nutrition in rural Ethiopia

Insight into the role of safety nets that contribute to adult nutrition is an important component to understanding the dynamics of poverty in developing countries. This article uses panel data from rural Ethiopia on individual nutritional status to test for an effect of public transfers on adult body mass index (BMI). Results show that among adult household members, male members are the primary beneficiaries of food aid as male and female aid recipients tend to invest aid receipts in male household members. These results are consistent with a theory in which additional resources are allocated to members of the household whose market returns are higher or those who engage in activities that expend higher levels of energy. For high‐asset households, female household members benefit if the aid recipient is a female. Women in low‐asset households appear to be adversely affected by aid receipts, and evidence suggests that women with little bargaining power suffer the most. The results suggest that aid receipts are useful in mitigating fluctuations in adult BMI over a short time period.     

Determinants of smallholder farmers' participation in banana markets in Central Africa: the role of transaction costs

A bivariate probit model was employed to jointly and separately estimate banana market participation decisions of buying and selling households in Rwanda and Burundi using household survey data. Selectivity bias was corrected for estimating the transacted volumes using Heckman's procedure. The results showed that transaction cost‐related factors such as geographical location of households, market information sources, and travel time to the nearest urban center influence market participation. Non‐price‐related factors such as security of land tenure, labor availability, off‐farm income, gender of the household head, and years of farming experience had a significant influence on the transacted volumes. Output prices had a significant correlation with sales volume, indicating price incentives increased supply by sellers. Generally, the findings suggest that policies aimed at investments in rural road infrastructure, market information systems, collective marketing, and value addition of banana products may provide a potential avenue for mitigating transaction costs and enhancing market participation and production of marketed surplus by rural households.     

The adoption of intensive monocrop horticulture in southern Cameroon

Results from a 1997 survey of 208 households in the humid forest zone of southern Cameroon indicate that African policy makers seeking to intensify agricultural production should focus attention on the horticultural sub‐sector. The survey, which gathered information on horticultural production practices, found that the average expenditure on agro‐chemical inputs by horticultural producers using monocrop production systems was 190US$/ha, which greatly exceeds the FAO reported national average expenditure of 6.50 US$/ha. A logit model of monocrop adoption indicated that the size of land holding per household had a negative effect on adoption, congruent with population‐driven technical change and that increases in unit transportation costs significantly decreased the probability of adoption. These findings suggest that policy makers should target horticultural intensification in areas of higher population density and promote investment in rural roads. The age of the household head had a significant negative and elastic effect on adoption, which in combination with an increase in the cohort of younger farmers in the rural population induced by macro‐economic events contributed to the spread of intensified horticulture. In the study area, roughly two‐thirds of rural households also produce cocoa and the quantity of cocoa produced was positively associated with adoption of intensive horticultural systems suggesting that export crop promotion indirectly facilitated diversification of agriculture. Women's participation in intensive monocrop production was limited and efforts to promote their greater involvement are recommended.     

Economic analysis of different options in integrated pest and soil fertility management in maize systems of Western Kenya

The major biotic constraints to the production of maize, the major staple food in Western Kenya, are field pests such as Striga and stem borers, and low soil fertility. To counter these constraints, new cropping systems have been developed, including “push‐pull,” rotations with promiscuous soybean varieties and green manure crops, and imidazolinone resistant‐ (IR‐) maize. To analyze the technical and economic performance of these technologies, both with and without fertilizer, on‐farm researcher‐managed long‐term trials were implemented over six seasons in two sites each in Vihiga and Siaya districts of Western Kenya. The economic results, based on marginal analysis using a multioutput, multiperiod model, show that the new cropping systems with fodder intercropping (push‐pull) or soybean rotations were highly profitable. Push‐pull is more profitable but requires a relatively high initial investment cost. Green manure rotation, IR‐maize, and fertilizer all increased yields, but these investments were generally not justified by their increased revenue. We argue that research on rotation and cropping systems to tackle pest and soil fertility problems in Africa deserve more attention. This will require increased collaboration between agronomists and economists to set up long‐term experiments with new cropping systems to develop proper economic models.     

Effects of microcredit and other loans on female empowerment in Bangladesh: the borrower's gender influences intra‐household resource allocation

This article examines microcredit's effectiveness in empowering women borrowers in rural Bangladesh. It does so by examining how gender‐specific borrowing activities influence household expenditures which are either specifically of interest to men or women, and by examining the effects of all loans rather than only those provided by microcredit organizations. The article uses a quasi‐experimental design to identify the effects of borrowing by men and women by using an original combination of panel data and instrumental variables on subsamples of the surveyed population. It finds that the borrower's gender affects how households allocate their resources to different expenditure items and assets that are valued differently by men and women. In all, the findings suggest that providing greater credit access to women may improve their household bargaining positions.     

Diet transformation in Africa: the case of Ethiopia

Africa's food systems are changing fast amid rapid economic growth, emerging urbanization, and structural transformation. In this study, we use four rounds of nationally representative data from Ethiopia to document changes in household food consumption patterns over a period of unprecedented economic growth. We find that while the share of food in the total consumption basket is declining, food quantities and calorie intakes have considerably increased between 1996 and 2011. A decomposition analysis suggests that this was mostly driven by improvements in household incomes—a finding that is consistent across the calorie distribution. Also, the content of the food basket is changing with a gradual shift toward high‐value foods such as animal products, fruits and vegetables and processed foods. Overall, this diet transformation has important implications for the food security debate and for agricultural and food policy in the country.     

Selling Together: The Benefits of Cooperatives to Women Honey Producers in Ethiopia

Smallholder farmers in developing countries encounter multiple barriers in access to inputs and technology, which prevent them from reaping the benefits from market participation. Women farmers face additional constraints due to gender norms that further limit their engagement in productive activities. While collective action has been shown to improve access to markets and economic outcomes for farmers overall, the evidence on the effects of cooperative membership for women smallholders remains limited. We investigate empirically the economic benefits of collective action for women farmers in the honey sector in Ethiopia. Relying on a rich data set on women honey producers, both cooperative members and non‐members, we evaluate the effects of belonging to a cooperative on three outcome variables through coarsened exact matching and regression analysis. Our results indicate that cooperative membership significantly increases the market price and the production quantity and, while the average effect on the share of product marketed is statistically insignificant, significant differences emerge for women with given characteristics. These results are shown to be robust to a number of tests that address biases from selection on observables and unobservables. An analysis of the heterogeneous effects of household membership in multiple groups finds that membership of self‐help groups or farmer associations amplifies the positive outcomes from belonging to a formal cooperative. Finally, qualitative findings derived from the same communities indicate self‐reported improvements in agency and self‐esteem among women members, thus reinforcing the importance of the quantitative findings.     

Risk, uncertainty, and learning in adoption of a crop innovation

Risk and uncertainty have often been suggested as causes of poor adoption of rural innovations, but empirical evidence has been scarce. This study focuses on a new crop‐type, chickpeas, in Western Australia to gather such evidence. The empirical models developed are based on a theoretical framework that conceptualizes adoption as a dynamic decision process involving information acquisition and learning‐by‐doing by growers who vary in their managerial abilities, risk preferences, and their perceptions of the profitability and riskiness of the innovation. Learning encompasses improvements in skill as well as reductions in uncertainty. An annual face‐to‐face survey of over 100 farmers was conducted over 3 years, eliciting the farmers' risk attitudes and their subjective distributions of yields and prices. Two limited dependent variable models, Tobit and Probit, are used to estimate the empirical model. There is a high degree of goodness‐of‐fit for both models. The study provides strong empirical support for the primarily economic character of the adoption decision, and highlight the importance of economic risk in the process. The two risk‐related factors with greatest impact on the adoption decision were risk aversion and relative riskiness of the innovation. Risk aversion tended to reduce adoption, and to do so to a greater extent as relative riskiness and scale increased. Results also reveal the key role that trialing of the innovation plays in adoption.     

The nexus between gender,collective action for public goods and agriculture: evidence from Malawi

Across the developing world, public goods exert significant impacts on the local rural economy in general and agricultural productivity and welfare outcomes in particular. Economic and social‐cultural heterogeneity have, however, long been documented as detrimental to collective capacity to provide public goods. In particular, women are often underrepresented in local leadership and decision‐making processes, as are young adults and minority ethnic groups. While democratic principles dictate that broad civic engagement by women and other groups could improve the efficiency and effectiveness of local governance and increase public goods provision, the empirical evidence on these hypotheses is scant. This article develops a theoretical model highlighting the complexity of constructing a “fair” schedule of individual contributions, given heterogeneity in costs and benefits that accrue to people depending, for instance, on their gender, age, ethnicity, and education. The model demonstrates that representative leadership and broad participation in community organizations can mitigate the negative impacts of heterogeneity on collective capacity to provide public goods. Nationally representative household survey data from Malawi, combined with geospatial and administrative information, are used to test this hypothesis and to estimate the relationship between collective capacity for public good provision and community median estimates of maize yields and household consumption expenditures per capita. The analysis shows that similarities between the leadership and the general population in terms of gender and age, and active participation by women and young adult in community groups, alleviate the negative effects of heterogeneity and increase collective capacity, which in turn improves agriculture productivity and welfare.     

Disability and household economic wellbeing: evidence from Indonesian longitudinal data

A health shock in general, and a disability in particular, may expose households to material insecurity due to out-of-pocket health expenditures and reduced earnings. Studies on the impact of disability on household welfare in developing countries are scarce, although the expected impact is large given the absence of social protection programmes. Using a unique Indonesian longitudinal dataset with individuals followed over a 17-year period, this study analyses the economic impact and coping mechanisms adopted by households following a physical disability. Fixed effects estimations reveal that households experience rising health expenditures and reduced labour income. Households cope by reducing their food, non-food and education expenditures, selling assets and receiving more remittances. While all household groups are affected by disability, only the poorest households become significantly more likely to cut their food expenditures.     

The impact of strengthening agricultural extension services on women farmers: Evidence from Ethiopia

This paper evaluates the effect of the Rural Capacity Building Project (RCBP), which aimed at promoting growth by strengthening the agricultural service systems in Ethiopia, and by making them more responsive to smallholders’ needs, in particular women farmers. We examine the gender‐differentiated impact of the RCBP using panel data on 1,485 geographically dispersed households in project and control kebeles. We find that women farmers’ access and satisfaction with extension services increased significantly immediately after the start of the project, but that effect did not last into the medium term. The project led to an increase in the adoption of high‐value crop farming, area of land cultivated, and economic participation of household members, benefiting male‐ and female‐headed households equally. Results point to the positive impact of incorporating women's needs and constraints in the design of the agricultural extension system. However, the project was not able to reduce the preexisting gender gap in agricultural outcomes.     

The effects of food sales taxes on household food spending: An application of a censored cluster model

This study proposes a model of household food spending that accounts for zero censoring and can be applied to data collected through a clustered survey design to investigate the impact of food sales taxes on three groups: households who are eligible for and participate in the Supplemental Nutrition Assistance Program (SNAP), households who are eligible but do not participate in the program, and households who are not eligible for the program. We find that SNAP participating households are largely insensitive to grocery taxes and respond to restaurant taxes by shifting more of their food dollars towards at-home foods. Among households who are eligible for SNAP but do not participate in the program, grocery taxes reduce spending on foods purchased for at-home consumption, and thereby increase the amount of the total food budget allocated to away from home foods. This is concerning from a nutrition and health standpoint since away from home foods tend to be more calorie dense and nutritionally poorer than at home foods.     

Does participation in the conservation reserve program impact the economic well‐being of farm households?

This study uses U.S. farm household survey data to examine how participation in the Conservation Reserve Program (CRP) affects farm household economic well-being. Further, the study also examines the effects of CRP participation on farm household consumption, income, and imputed savings. In contrast to previous studies that assume the relationships are homogenous across the population, quantile regression is used to investigate the association between CRP participation across the entire distribution of farm household consumption and income. Empirical findings suggest that the effect of CRP participation on household economic well-being differs across the income and consumption distribution. For households in the lower percentiles of the distribution, the CRP participation is associated with an increase in household consumption, but a decrease in farm household income and savings. In contrast, farm households at the median and higher income and consumption quantiles, participation in CRP is associated with lower levels of household consumption and income, but with higher levels of savings.     

Access to a Telephone and Factor Market Participation of Rural Households in Bangladesh

This paper assesses the impact of access to a telephone on rural households’ factor market opportunities. It answers two questions. First, does the use of a telephone have any impact on rural households’ factor market participation? Second, correcting for market participation, does the use of a telephone have any impact on the type of factor market participation? For the first question, the paper uses a bivariate probit to correct for omitted variable bias and for the second question, the paper uses a two‐stage probit. The empirical findings suggest that access to a telephone has a significant positive impact on factor market participation. The difference in market participation between telephone users and non‐users is around 14%. However, once a household participates in the market, the use of a telephone does not have any impact on specific factor market participation.     

Worth the Risk? The Behavioural Path to Well‐Being

There is increasing interest in the ‘economics of happiness’, reflected in the volume of articles appearing in mainstream economics journals exploring the major determinants of self‐reported well‐being. We contribute by exploring the factors influencing how satisfied farmers are with their quality of life. We find that farm income, subjective perceptions relating to the adequacy of household income, debt, health and personal characteristics such as age and relationship status are significantly associated with farmers’ self‐reported life satisfaction. While significantly associated with farm income, farm structural variables such as farm size, farm type and the presence of a farm successor were not found to be significantly related with life satisfaction. Our results also suggest that farmers who are more risk averse enjoy significantly lower levels of both life satisfaction and farm income than their more risk seeking or risk neutral counterparts. We suggest that, in the same way that risk aversion inhibits farmers from making choices that could lead to an increase in their income, it may also constrain farmers (and the wider public at large) from engaging in certain types of behaviours that could lead to an increase in their self‐reported quality of life. Finally, we find that while farm income is significantly related to self‐reported life satisfaction, the direct correlation between these variables is weak, suggesting that farmer life satisfaction can be distinct from business success.     

Understanding the determinants of rooftop solar installation: evidence from household surveys in Australia

Australia is a world leader in household uptake of solar photovoltaic systems. In this paper, we use household‐level data to identify economic, social, and environmental factors that influence actual uptake and the intention to install. We find that higher net wealth is generally associated with higher likelihood to install. Households that have mortgages, that spend more on electricity, and that pay higher average electricity prices are more likely to intend to install. Environmental preferences and related behaviours, property tenure, and space constraints are associated with both actual uptake and intention to install. We use data from the Survey of Income and Housing of 2015‐16 and the Household Energy Consumption Survey of 2012.